OTTAWA, March 25 (Reuters) – The Bank of Canada’s primary focus is to return hot inflation to target and it is prepared to act “forcefully” with rate hikes to do so, particularly as price pressures broaden, a deputy said on Friday.
Sharon Kozicki, in her first speech since joining governing council last year, also said the pace and magnitude of interest rate increases, along with the start of quantitative tightening, would be actively discussed at the central bank’s April meeting.
“Inflation in Canada is too high, labor markets are tight and there is considerable momentum in demand,” Kozicki said, speaking via webcast to the Federal Reserve Bank of San Francisco.
“It’s important to be clear that returning inflation to the 2% target is our primary focus and unwavering commitment. We have taken action and will continue to do so to return inflation to target, and we are prepared to act forcefully,” she said.
The Bank of Canada hiked its policy rate to 0.5% earlier this month, its first increase in three years. Rates were slashed to a record low 0.25% amid the pandemic. Inflation hit 5.7% in Canada in February and is expected to go higher.
(Reporting by Julie Gordon, editing by David Ljunggren)
((Reuters ottawa bureau, +1 647 480 7921, david.ljunggren@tr.com))
